EntreLeadership - Is My Business Too Niche to Grow?

Episode Date: October 14, 2024

Today we’ll hear about:  A woman having trouble finding the right people for her niche business   A young business owner struggling to lead his team   Why Dave Ramsey says that hiring highly skilled people is not enough   Dave showing a business owner how to make his product profitable    Next Steps  📞 Have a question for the show? Call 844-944-1070 or send us a message: https://ter.li/ask-us  📚Learn about the EntreLeadership System: https://ter.li/system-p  💻 Get EntreLeadership Elite for your business: https://ter.li/elite-p  ✉️Sign up to receive tactical tools, advice and resources in your inbox every week: https://ter.li/enl  🏢 Attend EntreLeadership Summit: https://ter.li/summit   🎤 Attend EntreLeadership Master Series: https://ter.li/masterseries     Offers From Today's Sponsors  NetSuite: https://netsuite.com/Ramsey  BELAY: https://www.belaysolutions.com/entreleadership  Payority: https://www.payority.com/entreleadership  Trainual: https://trainual.com/entre  Found: https://found.com/entre    Listen to More From Ramsey Network  🎙️ The Ramsey Show    💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💰 George Kamel  💼 The Ken Coleman Show     Learn More About Your Ad Choices   Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

From the headquarters of Ramsey Solutions, this is the Entree Leadership podcast, where I take calls from leaders like you about what it takes to win at any stage of business and leadership. I'm Dave Ramsey, your host with over 30 years of experience leading in the trenches right alongside you. If you have a question you want to ask on the show, fill out the form at Entreeleadership.com slash ask or call and leave us a voicemail at 844-944-10. 70. Amy is in Indianapolis. Hi, Amy. Welcome to the Entree podcast. Hi, Dave. Thanks so much for having me. Sure. What's up in your world? Well, I need some advice. I am a co-founder of a consulting firm.

It's pretty boutique. We exclusively work with surgeons. We help surgeons start, grow, and operate their businesses. So we do everything that's non-clinical, everything to run the business side of the surgical practice. Practice management? Is that what we would call that? Yes, that's right. Okay. And so I am just running as hard as possible on this treadmill and looking for advice on how to scale a business that I feel like it's very niche, what we do, the knowledge that

it takes to consult and to know the ins and outs of a surgical practice. I'm just having a hard time building a team of other consultants that can operate at that level. And yet I know I need to because I'm exhausted and can't run any harder or faster on this treadmill. Yeah, you've filled up your slots in the day. And you've hit a logistical bottleneck. So there's plenty of business. That's not the problem. The problem is creating the expertise that's trustworthy,

that's going to carry the quality into those practices that's equal to you. Am I right? That's exactly right. And if I can add to that all of our clients come to us, I would say 5% maybe see me speak at a conference. So I am going out and speaking at big national meetings and they connect with me there. But 95% are word of mouth. So it's other surgeons. we've worked with that, you know, sing our praises. And but they, I'm saying our and we, but they're saying, Amy, call Amy. That's who you need. And so I'm not only struggling with developing other consultants that have the expertise,

but then how do I transition that referral to somebody on my team when I just can't physically, you know, continue to take on more clients. Well, that's easy. When they come in the door, you say, I'm going to have you work with our top person, and I'm going to hold their hand while they hold your hand to make sure that they get it right. But they're going to do most of the heavy lifting with my oversight because my calendar's full. I can't take you on. And you'll get, you know, you may lose one or two here or there, but 97 out of 100 won't bind that because you're telling them you're going to be looking at it.

Okay. You know, an example is I quit doing financial. counseling almost 30 years ago, one-on-one financial counseling. And about 15 years ago, I don't even counsel my friends. If they want to come in and sit down with the financial counsel, Dave, I need your help with something. If I ascertain in that conversation that their favor that I'm doing for them, this is a freebie, right, is more than a 30-minute thing. I bring one of our coaches in to sit with me because I'm going to do a handoff in that first meeting. I'm going to spend 30 minutes with them, and then they're doing that. I've got some friends going through a divorce right now. Both of them called me, and I'm helping both of them equally. And I'm as a friend, I'm not where it's not a charge,

but it's an example of they wanted Dave to help them weed through their mess in the divorce. And I'm like, no, you don't. You actually want somebody that's going to have time to do it and do it right. I'm going to be playing golf somewhere. You don't want me. So, I mean, you're not playing golf, but I'm just saying that that's the, it's a handoff. Sometimes you set, but it's the way you set the meeting up. So that part's easy. And the biggest, the person that is the most uncomfortable with that part is you.

It's not the customer and it's not the new person that's going to be helping them. Because the new person that's helping them thinks they're better than they are. The customer thinks if you say it's okay, it's okay. and you're the one that has trepidation over the whole thing. Yeah, you're not wrong, but I do think. Or you should have, you should care. Right, right, I do. And that ties into, I mean, I don't.

Then that comes to who we're hiring and how we're training them. Correct. And how we're training them. And so you're not going to hire someone that's going to be handling a practice on their own in six weeks. No way. No. it's not possible because even if they have done practice management in the dental world or in the general practice world or the pediatrician world or the veterinarian world which are similar there's nuances

to what you're doing in the surgical world and the way Amy does it that that person doesn't know we just hired an expert product manager from one of the biggest retailers in the world that is an absolute expert, stud, knows what he's doing, is having to learn the Ramsey way of doing things too. So he's going to be useless stud for a little while, until he gets up to speed. And then he'll be amazing because he's smart and he'll catch it and he'll find the parallels between what he used to do and in this,

and he'll find the way to fit it in. But you've got to train. And so you're just going to be, you know, walk alongside. you're going to walk alongside them for the first three or four times they do it. It's going to take six months before you can turn them loose, even 50%. Mm-hmm. Okay. And I suppose that is pretty close to what I've done.

I have brought on two other consultants, and they're doing fine. I have to reel myself in when they do things, maybe not exactly how I would do it, but it's still a good result, and it's still serving the client. And so, you know, it's hard. You know, we can have a talk. I don't mind discussing those things in my one-on-one with them. You did this in a way I wouldn't have done it. Here's how it made me feel.

I'm not sure if it's okay, because I think it's okay, but I need you to know I'm kind of uncomfortable when you don't do it my way. And it's okay. You could do it your way, but I'm not going to leave that tension in the air because if you do that time six of these people, that's going to be a lot of tension in the air. And so I let the air out of that balloon every time I'm meeting with somebody. I'm going, you know what?

You actually got a good result on that. I wouldn't have done it that way, so it made me a bit uncomfortable. But, you know, you're good. I'm not correcting you. I'm not telling you not to do that. But I'm going to say out loud that you scared the crap out of me when you did that. And it helps me because I got that out of my system then. I can move on.

I don't think about it again. And they know when they step outside of the set Dave or Ramsey way of doing things, that it makes people around here uncomfortable, including me. You know, and so it's a good thing for them to know that. So instead of like, oh, I'm actually better at this than Amy because I figured this out, no, that's not what happened at all. Right? Yeah, yeah.

Lots of communication and it's okay. You're not killing their little creativity to tell them they did it different. And if you are, they're a sensitive flower and they're not going to make it anyway. No. especially not with surgeons. Yeah, toughen up, Buttercup, right? So can I ask a follow-up to that? Sure, sure.

When you said in the one-on-one, and I think that's probably another area that I'm, I feel like I'm communicating a lot, and it's more like, join me in this meeting, let's talk about it, but maybe I need to have a more structured one-on-one. Yes, you do. Weekly.

It could be whatever it needs to be to get the communication level up, because you're using this for the last bit training. Some of your training what happens on site and your course correcting while you're standing there or as you're driving away together in the car, you're having a postgame film review and you go, no, no, that don't throw the ball over there, no. Or, but then overall, you just need to check in and go, okay, how's this customer doing? Tell me what's happening over there. What trouble have you got? How can I help you? Here's one thing I saw made me uncomfortable. I want to tell you about it. And you just, you know, it's a lot.

lot of little tiny. If you do that with a regular frequency, every two weeks, every month, I don't care, at least once a month, though, you're re-steering only 2%. If you wait and do it till you're pissed off, now you're resetting the course 25% because the boat's gotten completely off course. So the training and it's mentoring, discipling is what you're doing. You're meeting with them saying, this is how we do it. This is. is how we do it. This is how we do it. Oh, you just discover something new. We're going to add that to how we do it. Okay, that's fine. And we keep learning and keep working through discomfort and training and pushing along. And that will help you a bunch. Plus what it does, Amy, is it increases

your confidence that the person is competent and that they have integrity, that they're following through. The more confidence that you have in their competence and in their integrity, the more you'll turn loose of them and go on to building the next one. Very, very cool stuff. Great questions. You are an amazing young leader. You're going to do great. I'm very proud of you. Thank you for calling in. This is the Entree Leadership Podcast. If you're a business owner in the Trailblazer stage of business, then you've got to invest in your leadership team. Leadership development is how you scale to the next stage from Trailblazer. You build into new leaders. You need leaders that lead. people, not just you leading people.

And you're about to miss the best opportunity of the year to do just that. Entree Leadership Master Series is happening in less than four weeks. I'll be there with some of the top leaders in Ramsey to teach you all the tactical leadership lessons we've learned in the last 30 years of business. Even better when you watch this with your leadership team, you'll walk away with bought-in leaders who lead like you and a custom plan to attack the right problems together. You can stream it live November 11 through 14 or watch it on demand for up to 60 days after the event. To get your ticket, go to entreleadership.com slash live stream or click the link in the description if you're listening on YouTube or podcast. Lincoln in Asheville, North Carolina. Hi, Lincoln. Welcome to the Entree podcast.

Hey, what privilege is to be able to speak with you today? You too, sir. Thank you. So I am 20 years old. I own a landscape company. We have a staff of nine. In 2023, we did about $560,000 in revenue top line. This year we're going to do about $850,000 to a million with about $150,000 in profit after I get paid. My question is, is I feel like I'm not doing a great job being a leader for my team and I want to learn how to be a better leader at such a young age. What do you think you're doing right and what do you think you're doing wrong? I don't really think there's anything that I'm necessarily doing right or wrong,

but it's where like a couple issues we're having now is we do have a high turnover rate. I think that might be just because it is hard work. I'm not quite good at hiring the correct people yet. The other thing is I think one of the big things I actually am doing wrong is I don't know how to lead other leaders, if that makes sense. It does make sense, yeah. How many different crews have you got? We currently have six.

Okay. So you need six crew leaders, right? Correct. And you lead the six crew leaders? Yes. Yeah. Okay. And they're young guys, and they're out there with a blower or a weed eater in their hand

when that crew hits the ground, right? Well, most of them are between the ages of probably 35 to 50. Okay. But they're player coaches? Yes. Okay. They're in the field working and leading. Correct.

Like the crew jumps off the truck and attacks along, comes back, gets on the truck, goes, does the next one. Yep. Our crew hudgers always wins first one out. Yep. to get everybody else to work. Yep. Okay. All right. Are you on site doing any mowing anymore, any actual work, any of the labor?

Not often. I try to a couple times a week, but I'm mostly stuck in the office. I really don't want you to, but I was asking. Okay. All right. I think the first thing I learned, and I was probably 10 years older than you when I learned it was that bosses push, leaders pull. A boss is standing behind the cattle, cracking the whip, going, y'-h-ch-ch! Get on! Get that done. H-h-h-h-h-cratking the whip, right? When you do that,

the organization moves at the slowest common denominator, the speed of the worst person. Okay? Okay. leaders walk around front of the cattle, so to speak, and are the people, and say, guys, we're going this way. And I'm going at this speed. And here's what I expect. And if you want to be on this train, it leaves at 1136, and you will be dressed a certain way, doing a certain thing to be on the train. And if you're not here, the train is going to leave you, because This is a big bad boy train and it's moving. And if you want to be part of this thing, this is what we're doing.

This is what we do. If you don't do that, you're not a we. That's a leader standing in front pulling. You see the difference? Yes. And then your job, if you're back at the office, is to talk to your crew leaders and ever so often hit the job sites about when they do. Stand and watch the work.

Walk over, talk to the guys, talk to the crew leaders, encourage the crew leaders, brag on people, give somebody a gift card to the local restaurant for doing a good job, catch people doing something right, ask the leader, the crew leader, what they need from you, how can you help, how can you serve, what problems have they got that you can solve for them to keep the boat moving, to keep the train moving.

And your job as a leader is to serve your leaders. Their job as a crew leader is not to boss and crack the whip, it's to lead. And they get off the truck and they say, young man, we're about to cut this grass or get on it, let's go. We're about to do this. Let's remove this. Got to do that, got to do that.

And that's not cracking the whip. It's standing in front, pulling and pulling and pulling. And we got to step it up. We're behind on our schedule. We got to move it. Rain's coming in. Rain's coming in. Rain's your dadgum enemy, isn't it?

Yes, especially right now. Mess up schedule. I find so difficult is, you know, I want to be a leader, and that's why I do go out a couple days a week, and not for long, like an hour, I'll go to a job site where if we have a mowing crew out there, I tell them hop on the mowers, I'll weed eat everything, because that's what the guys don't like to do. But when I get to sit in, like, the air-condition office all day and they're out in the heat for 10, 11, 12 hours working their butts off, I feel like it's really hard to pull them along and not push them in. The actual guys, that's true, but not the crew leaders. The crew leaders know your job is to help them get their job done. And so when I'm meeting with one of my guys and there's an area of the company not doing what he's supposed to do, it's like, okay, I'm not going to crack the whip on him or her.

I'm going to say, okay, how can I get down the ditch and help you get this thing out? You're stuck. What are we got to do? What do you need from the personalities? What do you need from events? What do you need from the social media team? How can we get this up and running? what's your problem?

Where's the breakdown in your model? Where's the breakdown in your revenue chain? What's going on? How can I help? And that's what it sounds like. But it also has inherent in that servant idea that we're going to move this thing along. When I realized that, Lincoln,

it even changed the way I negotiated and talked with my teenagers. Because I realized my job is not to make great kids. My job is to turn kids into great adults. how can I help you be a better man talking to my 15-year-old? Daughter, how can I help you feel safe and protected and be the princess that I know God made you to be? How can I help you be that as your dad? And oh, by the way, that means you're going to go to school. That means you're going to come in.

I'm going to serve you by making you brush your teeth so you have some. I'm going to serve you making you do your homework. that's me serving you because you're going to go to college someday and you're going to graduate. When you graduate, you're actually going to be useful human being. And that's me serving you because otherwise people who have horrible study habits, have horrible hygiene habits, you know, horrible whatever habits, because their parents were wusses. They didn't serve them.

So sometimes serving them feels like bossing, but it's serving them. And I think most of the older guys, don't get me wrong, we have such a great team that work here. I wasn't, you weren't bad-mouthed anybody. Everything's good. Yeah. But most of the older guys, they always come in and they talk about how they could never do, like, my job

or the lady who works in our office because we have to deal with clients all day. Yeah. But I guess the more of the problem is with some of these younger guys, which everybody's older than me, but some of them are only older by a few years. Well, those guys, you need to teach your leaders to lead those young guys. And if they're sitting in there in that 30 to 5. 40 or 50 range and the other guys in their in their 20s let me tell you the number 78% of men in

America in their 20s spent some time in a single parent household your crew member may be their first dad I know that so it's not unusual that they are looking for a stable godly male figure that's not a twerp that hasn't got a filthy map mouth that it's good to his wife and they need a model and that looks at those young guys as their little brother and is going to love them well or looks at them almost as a son and is going to love them well. I'm going to teach you that. I know that almost all the professional sports people we deal with, the coaches that are the best in the NFL, they take that role because they're well aware most of the guys on their team don't even know who their dad is. And so I've had many of those coaches

look at me with tears in their eyes and go, I'm the first daddy had. And so, and they take that role as an opportunity to be a blessing to those young men. So you could teach those crew leaders that. So, guys, you know, you got an opportunity here to change that young man's life to teach him to be honest, to teach him to work hard, to teach him to have a callous, you know, in a culture, at Listen, in a culture where people don't know how to work, man, you got an opportunity to be a blessing of these young guys and give them something nobody else could give them. And that crew leader, that's how I would be talking to your crew leader,

you're not just there to crack the whip and get the yard cut, buddy. You're there to love these young men. That's your job. Your job is to love them like they're yours and take care of them. And if they need something, if the equipment's half butt, we need to get the equipment fixed. If the customer's bitching, send them to Lincoln. He'll take care of the customer.

That's his job. None of us want to screw with that. And, you know, whatever. And, you know, my job is to make, these are my guys. This is my little band of brothers right here. And when you start looking at it that way, rather than they are units of production, then they'll start sticking around

because it's the first dad they ever had. And they're not leaving him. They're going to hang out with him. He changed my life. And I can tell you, I mean, I had a dad, but I can tell you men I've worked for that took that position that had a huge influence on my life anyway in spite of that. So that's not a bad thing. There's nothing evil about that, nothing weird about it, unless you make it weird. But, you know, that's what I'd be teaching those guys.

You're a good leader already just because you're thinking about this stuff, Lincoln. Thank you. Well done. Keep it up, Stud. This is the Entree Leadership Podcast. I think the first time I heard it, and I've heard it several times since in different places, and I've heard it come out of my mouth for 25 years, was Ken Coleman, as a Ramsey personality, was interviewing the most winning basketball coach in history, which was Pat Head Summit at the University of Tennessee.

She had almost 100% graduation rate among her students, and the vast majority of them were on the honor roll. and they won national championships year in and you're out while she was at the helm of that. Most of you, or some of you may know, she got early onset dementia Alzheimer's and is no longer with us. But I got to meet Pat several times. I was a University of Tennessee advisory board and was around a lot of the coaches and stuff in those days. But Ken was interviewing her, and she told the story that in her first year she got whipped, and she called her dad and her dad was like a no-nonsense in your face.

She figured he was going to have something pretty negative to say. And he kind of hit the middle. He didn't really go negative, but he didn't really go like, oh, it's going to be okay, baby. Instead, he said, so you lost? She said, yeah. He said, well, you're not going to win the Kentucky Derby with a donkey and hung up.

Turns out you need thoroughbreds. to win. And I picked that up, and I figured out at that time, the first time I ever heard that, there was many, many years ago, decades ago around here, I figured out that donkeys and thoroughbreds in the same stable doesn't work because they don't like each other. Donkeys don't like thoroughbeds being around because the very presence of a thoroughbred exposes a donkey's donkiness.

Just the peribret being there. What's a thoroughbred? A thoroughbred is somebody who's humble, hungry, and smart. Langeoni says. The thoroughbred is somebody that cares deeply. The thoroughbred someone is excellent. The thoroughbred someone has not only got skills, but they've got humility.

They're good with others. They care deeply about the organization. They care deeply about the customer. They are just awesome to have on the team. The donkey comes in late, leaves early steals while they're there, and wishes you would do more for them. They're entitled little spoiled brats. And that's whether they're 60 or 16.

Donkeys are takers, thoroughbreds or givers. Thoroughbreds add value. Donkeys eat you out of house and home and stir up trouble while they're there. Donkeys don't like it when thoroughbreds are in the stable because it exposes their don'tkiness. When excellence stands beside horrible, horrible stands out. And thoroughbreds don't like don't like don'ties around. Because people that work hard and care, they don't like it when other people get paid for sitting on their butt and not caring. and half butt mail in it in.

And the first one out of the parking lot and the last one to get in the parking lot. And everybody knows who they are. I mean, four o'clock, five o'clock, don't let the butt hit you in the butt, because you're already in the car going. And I'm not doing much except checking my Facebook account all day while I'm there.

Everybody knows who they are, except the leader, who hadn't bothered to look. So I figured that out really, really early because I had hired some people. My hiring method was, can you fog up a mirror if you can come help me? I'll give you money because I was so dumb when I started. I thought when you hired people, they would work. I thought when you hired people, they would care.

I thought when you hired people, they would treat the customer right automatically. Some of these people were freaking raised by wolves, man. I don't know where they come from with these manners and this process. But it didn't take me long to figure out everybody's not like me. And I had made a mistake or six. And there were people inside the building. One old guy was teaching a Sunday school class. And I was taking prayer requests at the end of the class.

Anybody got a prayer request. One guy raised his hand said, yeah, I need a job. I just lost my job. And I went, well, good news, I'm hiring. Come on over for an interview. He came over. We hired him. Then I figured out why he lost his job.

He was a donkey. Donkeys go to church too, y'all. So it's okay. And they dress up in the interview to look like thoroughbreds. So you've got to spend a little time interviewing them. Because if you don't spend time with them, you don't know. They kind of look like thoroughbreds when they're interviewing. They polish up everything and come marching in, strutting in like they know what they're doing.

But about the fourth or fifth interview with them, you'll hear a, he on. You go, wait a minute. I heard that. They'll start saying something, and you go, wait, I think I just heard entitlement. I think I just heard victim of. you're a victim aren't you oh yeah that's what i needs another dead gum victim in the building i don't think so nope and you have to work through this this is the people driver of the entree leadership system the

entree leadership system has six things that drive you through the stages personal which is you purpose which is setting your mission statement in place the people you put on the bus the ones you take off the bus the one you put on different seat on the bus according to my friend jim collins the plan which is your strategy, the actual product, which is the good or service you put out there, that results in then profit. Personal, purpose, people, plan, product, and profit. Those are your six drivers.

This is the people driver. The people driver is the one that is the most rewarding in all of business. It is the most frustrating in all of business. It is the largest line item in your payroll, your payroll on your P&L, on your profit and loss statement when you looked at almost every small business listening, by far the largest item in the profit and loss statement is payroll. You invest heavily into people, and you have to get a return on investment, meaning they

has to produce more than they cost, or you go out of business, or you're having layoffs because you hired a bunch of freaking donkeys. And I've done it. so I not had layoffs, but I've hired donkeys, and I had to have a donkey ectomy a time or two. It's the surgical removal of a donkey. That's called firing their butt. And you've got to be kind when you're doing that

because you don't want to upset the little donkey. He might turn into a thoroughbred someday. So we're trying to help him, right? But we're also going to be very clear and go, well, we don't do that here. We don't do that here. We don't do that here. We don't do that here.

Apparently, you're not going to be here. Because we've covered this with you six times, and you keep doing that. And so one more time, and it'll be your last, oh, okay, now you're gone. And you have to sit down and you don't surprise people. We don't walk in. We're not angry. We don't cuss at people.

When we get ready to let someone go at Ramsey, it is literally that. They feel released. They feel free. You know why we call it let someone go? It's because they were trapped. If you trap something, then you let it go. Things that are free, you don't have to let go. things that are happy you don't have to let go they're staying and they want to stay and you want them to

stay but if you had a noose around or a harness around them and you took the harness off and they bolt then you let them free that you set them free that's what firing is that's where it comes from when you fire a gun you're setting the bullet free all of these things have to do with um you know I got fired. I got let go. They were holding you against your will. You weren't free. You were duct tape and handcuffs.

I mean, how are you let go? How are you held against your will? That's how it feels, doesn't it? So you've got to sit down and be very clear with people, very kind to people, give them the opportunity to become a we. This is how we do it at Ramsey. If you're going to do it this way, you get to be a we. If you don't do it this way, we're not going to stay here.

And again, we use Pat. Blanchione's an ideal team player, as one of the constructs we used to talk about around here, hungry, humble, and smart. They have to be humble. And that doesn't mean they're lacking in confidence. It means they're not self-centered. They're other-centered. They have to be smart, and that doesn't just mean intellectually smart.

It means people smart. They know how to get along well with others. And they have to be hungry, as Les Brown says. Hungry. They got to have a motor running inside them. Get her done, baby. I care. I'm going to push stuff around.

When I push stuff around, there's friction, and I know that good. Let's get something done. And they can't be just one of those or two of those. They've got to be all three of those. And then we declare them a thoroughbred. And then when they get ready to hire other thoroughbreds, you know who I ask?

I ask my current thoroughbreds. Because you know who thoroughbreds run around with? and they're off time, other thoroughbreds, not donkeys. And they have a pretty good donkey detector. They can see a donkey a mile away. And they'll tell you, don't hire my friend. He's a donkey. Hire that friend.

Hire that cousin. He's a thoroughbred. He can win the race. And you'll get good referrals and good denials from your thoroughbreds. They'll help you build the team because they want to work with other thoroughbreds. Nothing's more fun than working with a hard. working team full of intelligence and excellence. That's fun. And nobody wants to screw that up once you get it built. So that's become the easiest part once we built it. And then if we accidentally let a donkey in

or somebody that comes in as a thoroughbred, they just decide they're going to turn donkey. I don't care. Whatever happens, we've got to remove them because life's too short to hang out with donkeys. So you sit down, you start looking at the components of a good hire. What is it I'm looking for? It's not just their stinking skills. Quit hiring people because of their skills. Oh my gosh, that's dumb. Yes, they have to have skills, but that is not enough.

If you hire a bunch of highly skilled crazy people, you're going to be running an institution, an asylum, a drama. Looks like a freaking daytime soap opera. in there with PhDs. And it's a disaster. And they're an intelligent disaster, which is even worse. So good Lord, quit hiring resumes and where you went to school. Kiss my butt.

Can you do stuff? Can you do stuff with good people? Can you work with other people? Can you care so deeply that it brings tears to your eyes when it's not done right? Do you get highly frustrated when stuff's behind? I do because I care. Get her done. If that's you, then you fit in at Ramsey, right?

You have to tell people what your culture is. This is what I expect here. If you want to stay here, this is what you're going to be. When you lay all that out, man, it changes everything. And then you communicate it all the time to the team. You communicate it in their one-on-ones. You communicate it in their updates. We communicated on the project.

We lay out clearly what the deadlines. are. We lay out clearly what the expectations are. And we don't meet expectations, don't even meet deadlines. That's a problem. We're going to deal with it. We call it out. So you're looking for thoroughbreds and then you organize them to win. And then you stand back and it'll take you years to build a quality stable full of these. And then the thing runs faster and bigger than you could have ever dreamed. It'll be the most satisfying thing you ever did. And it'll be the most painful journey

because people that you love will come around behind you and try to stab you. People that you love will turn out to be donkeys and you're going to have to release them even though you love them. Because this is a sports team. It's not a family to use the Netflix memo, right? and you got to perform. You keep throwing interceptions.

I love you, but you keep throwing interceptions. You're like, your job is a quarterback. You're going to have to sit somewhere else on my payroll. You can't keep throwing interceptions. I mean, you can throw some because everybody makes some mistakes, but you're throwing more interceptions and touchdowns.

This is a problem. I mean, the defense is dying over here because of you. They stay on the field all the time. And, you know, you got to have these performance standards for these thoroughbreds, and then sometimes it hurts, and sometimes people don't understand, and sometimes their feelings are hurt, and sometimes people you care deeply about are hurt. It just goes with it's hard to do the right thing when you're growing and running a business right. It's hard, but it's worth it because the stinking thing will outperform anything you ever could have done on your heart.

own when you grow this stable full of absolute studs and studs. I mean, you can do anything with a team that'll do that. They work together. They care about each other. They care about you. They care about the customer. They care about the excellence. They care about the outcome. That means while they're at work, they actually work. Oh, it's amazing. Who would have thought? And if you don't have that, time for some don't. leukectomies. It's time for removal. Get you some new ones, baby. That's not cold. That's just life. That's your job as the leader. Fill your stable with thoroughbreds. Or quit bitching about the lack of excellence because it's your fault. It's your fault if you continue to sanction the

incompetence. Fix it. That's my goal. Fix it. I'm I've been working on it 30 years. Fix it. It's a constant thing. Fix it. It's my job. It's what people look to me for. I have to do my job.

I know. I don't want to deal with it. I know. I don't want to deal with it either. Shut up and do your job. Suck it up, Buttercup. That's how this works. That's the people driver.

The most rewarding, the best ROI, and the biggest pain point in all of small business. This is the entree leadership. podcast. This is the Entree Leadership Podcast. If you like what you're hearing, spread the word for us, click the share button, the follow button, the subscribe button, leave us a nice five-star review. Mama said if you ain't anything nice to say, don't say nothing. Trolling is for children. Children troll. Billy Gook-Kruff. Just go look it up. It'll be good for you. Help you too. Thank you guys. Thank you for all the positives and all the five-star reviews and all the shares and all the

likes and all the subscribes. The numbers on this show are way up because of you. We really appreciate you. Ryan is with us in Jacksonville, Florida. Hey, Ryan, what's up? Hey, Dave. Hey, thank you for having me on. I'm a big fan and a long-time listener. Thank you. How can we help? Yes, sir. So I have two companies, both of which I own, have been running for about three years. I'm in the treadmill operator phase for both. My first is a company that I make my living off of and pull my income off of. It's a gas line installation and service company. We install gas lines and gas appliances for propane and natural gas.

Top line revenue for that company last year was $770,000. And I fluctuate between one and two employees. and this company takes up most of my time, most of my effort to run and operate. My second company is a product I invented and have a patent on that protects underground gas line and different underground utilities. Top line revenue with that company was $120,000 last year. This company, the way it works is I have a handful of distributors that use a product and sell it. It sells through well.

But I just don't have the time to put into it to grow it that I would like. You know, I do maybe a trade show a year and do what I can to keep up with the orders that come in. On the $120,000, what was your cost of goods sold? I have like a, as far as like net profit, I have like it's about 20%. So cost of goods sold. I'm not completely dialed in on that number. You're producing an item, are you not? Yes, sir.

Yes, sir. So out of $120,000, how many units did you sell? Let's call it, you know, I'm sorry, I can't put an accurate number on it. I sell it by the pallet, and like I said, I've just been looking at it overall net profit. Okay, well, how much is, how many of them is on a palette? 30 to a palette. 30 to a palette. How many pallets did you sell?

Let's call it close to 15 pallets for the year. Let's say that. Okay. So 450 units. Yes, sir. Okay. Do you have any idea of what you paid for those 450 units? Well, it's a product that we kind of like assemble and manufacture of a machine that I made for it.

Are you making them with your hands? Yes, sir. So you're machining them and assembling them? Yes. So all you've got right now is raw material cost then. You haven't factored in your labor yet. Well, when I tell you the net profit and factors in labor and everything, just because I use the one employer from my other company to help me make this product as well. Do you physically make the product?

Yes, sir. We have a machine that we make it with. Okay. All right. So you and the employer are in there making them and assembling them together? Correct. Okay. So you factored in part of the labor cost?

Because you didn't pay yourself labor in that. That's correct. I don't pay myself. So you made $20,000 for the labor you put into it, so you broke even? You haven't made a profit yet. Yes. If we paid you minimum wage to build $450 these dadgum things, you and another guy, you haven't many money yet. Just to be clear, I don't, I haven't, the last year I really didn't make any much myself. I'm more or less paid, I paid the employee to me.

make it. As far as the duties that I did, there's going to be the invoicing, the shipping, you know, more of the, you know, just the logistics of it. Okay. What I'm trying to figure out is if I want to scale this, if I'm losing 20 cents a watermelon, I don't get a bigger truck. Gotcha. That's what I'm trying to figure out.

And I think you've got to do some numbers crunching to get to the bottom of that. So, let's see, $10,000 to be 12. So you're selling these things for how much a piece? You're selling them by the pallet? Yes, sir. And how much does a pallet bring? It's right around like $5,500. Okay, all right.

And, all right, $5,500. Okay, so that's what you've got to do, start backing into some of these numbers and going, okay, if I get $5,500 for 30 of these and I sold 15 pallets, did I get those numbers right? Yes. Okay, I sold 15 pallets. 30. So I just take the 30 and the 15, the 5,500, and I start looking, okay, if I do that, and my raw materials cost is X and my labor cost is Y, that gives me my cost of goods sold,

which is called gross margin, your revenue minus your cost of goods sold on the item. Before there's any overhead commissions, business expenses of any kind, that's called gross margin, revenue minus actual cost of the widget. and the cost of your widget is labor plus materials. You got it? Yes. You need a pro forma of that out, lay that out, and then figure out, okay, that's my gross margin. And I put a little effort into it.

I help some in the shop. And even with counting that at zero, I only made $20,000. And so I've got about a, probably got about a 10% net profit running on this right now as all, which is pretty low. Okay. so I'm probably raising my prices for one thing. Is there anything you can do to the quality or the attractiveness of the item or does any of that matter? It's really kind of, it's more of a higher-end product as it is the competitor.

The competition for this product is like a cheaper version of it. So it's more for, hey, this has like a utility of actually protecting the line versus, you know, the other product only warns, you know, it doesn't actually physically protect, you know, the line and the ground. But they're paying more for it. So cost is actually like the main obstacle to the product, you know, as far as selling it and getting the customer. Well, that's because it's the, you're not competing with the other thing

because you're not the other thing. You have a complete brand differentiator already. You already told me what it is. And so then you've got a value, you've got to lay out your value proposition for your marketing. and that's say, okay, the value of doing this is a certain amount, and it only costs this amount. And so anytime someone's buying something, they put the item on, they put the cost and the time it takes to do the purchase

and deal with the situation on one side of the scale, and on the other side of the scale, they put the benefit of buying it. And they only buy if the benefit tips the scale, over the cost of the item and the hassle and the time it takes for the item. Right. And so that's a simple sales mechanism right there. So you're trying to say on the right side of the scale where the benefits are, I'm going to put a value proposition that's so heavy that it looks like they would pay $55,000

for this instead of $5,500. And because they're so excited they can't. This is the best thing since sliced bread. I've got to have this. And that's called selling. And it's not lying. showing them the true benefit of doing business with you and doing this thing. This is exciting, man.

I think it's a cool idea. So what I would do next is bring in an upper tier person, not a top person, but an upper tier person. And I would want their job description to be developing new markets, selling. Okay? Okay. And you're going to need to sell more. more than 30 pallets of this.

I can keep it in this backwards. Was it 30 pallets or 15 to the pallet? It was, yeah, around 15. 15 pallets, but 30 items on the palette, right? Yes, sir. Okay, so you're going to need to sell more than 15. If you sell more than 15, you're going to bring in more money than I'm already bringing in, and I will share a goodly portion of that until we get you up to making a living.

So go get us a bunch of new customers, and let's talk through how to do it. that and I'll walk with you and if you need some help or you need somebody go with you to talk to the customer or you need whatever, let's get this thing up and running and let's get some volume up because only then can we make the adjustment on price and on production and put a full-time person and they're building them because, you know, you don't need 15 pallets, you need 150 pallets. Right, right. And I will say too, I think once production does go up, my margins will also go up. Yeah, I could buy more, you know, and my efficiencies would be greater, you know, and so... Well, your machinery to build it, everything gets more sophisticated, faster, the people doing it'll get faster.

You'll clean it up, you'll clean up your production lines. Right now, it's kind of like a big old batch of prototypes. Exactly, right, exactly. So I think that's going to be the key, you know, so I think my margin is the weakest it'll ever be as long as I can grow it. Well, only if you're careful about it, because people don't watch. that inventors get all romanticized about selling this stuff, and then they get excited, and then they realize they're losing 20 cents of watermelon,

and all we did is get a bigger truck. Don't do that. Make real sure you're running the business side of this pro forma too while you're doing it. But I think you're right. I think I'm raising my price to $8,000, and I'm going to bring somebody in and pay them $2,000 a pallet. And I want you to go sell me 100 of those and make $200,000 next year. and oh by the way you're going to net more with that price raise and bringing that person in

than if they do that and you'll get all your efficiencies of volume going with it the economies of scale will go with it so yeah you're right on track to do that but it's going to be bringing in someone that's a little bit entrepreneurial a little bit scrappy they don't have to have somebody hold their hand to make a sale this is somebody almost that was in the same kind of business but failed and they just want a new target. They want, you need to, they're going to go off, so you need to aim them at something. This needs to be a self-starter, a lot of initiative. You can't babysit them.

They got to go get it. They got to leave the cave kill it and drag it in. You put that person in there and they go sell you 100 pallets. Now we've got a business running that will outperform that other business a thousand times over because this scales quick and easy once you get the sales model down, the production model down, and your performer laid out for actually. margins, now you can just turn up the heat, baby, and go. And that's your next step.

I definitely would be doing that if I was in your shoes right here. Very, very, very well done, sir. Proud of you. That's neat. That's exciting. Hey, let us know how it works next year. We want to hear from you. Remember, better a weary warrior than a quivering critic.

This world needs more high-quality leaders. Take courage and lead. I'm Dave Ramsey, your host. Thanks for listening to the Entree Leadership Podcast.